Executive vice president of innovation Kevin Haley talks about the annual R&D competition and its role in shaping the company’s future.

The overall winner of this year’s Under Armour Future Show Innovation Challenge is RaesWear, a small brand founded by Leigh Cockram, who designed a pouch-like system for carrying things like your phone, keys, cash, and more while working out.

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This marks the fourth consecutive year the company has invited a handful of companies, entrepreneurs, and inventors to participate in an in-house trade show exhibition, in which Under Armour employees vote on their favorite products and innovations. A select few are then chosen to take part in a Shark Tank-like presentation to company executives. This year’s runner-up winner was Handana, along with other finalists CoachUp, Arccos golf performance tracker, and Tangram Smart Rope.

But even though RaesWear won the $50,000 prize, Under Armour executive vice president of innovation Kevin Haley says that for the first time, the company will actually end up doing some kind of business with all the finalists. “Whether you’re talking to a well-funded Silicon Valley startup with $200 million in VC money, or that person in their garage, or to Dow Chemical who happens to have a new polymer with potential–they’re all in the same boat in some ways,” says Haley. “They lack the four things we can provide–the brand, the marketing, the distribution, and the sourcing. This year’s winner was an incredibly simple but elegant idea for improving apparel. It came from someone who I don’t think had any experience in the industry, but we’re very excited to see this go across a lot of our products because it is such a great idea.”

The Future Show, much like the brand’s marketing strategy, is steeped in the company’s goal of maintaining its underdog, entrepreneurial identity, despite now being a $4 billion global brand. Haley says the competition is central to both the brand’s overall innovation strategy and its heritage, in that it represents the company’s bootstrap beginnings as well as its commitment to collaboration. “If you go back in time, our founders were the athletes and looking at innovation that could be done quickly by partnering with other people,” says Haley. “They didn’t have a lab. There was no R&D department. So it was all about partnering with people who were the best at what they did and bring to light innovations that may not have come to fruition otherwise.”

The company’s insanely popular Cold Gear apparel came from CEO Kevin Plank spotting the material in a textile mill. Randy Harward invented the Cold Gear fabric while working for 27 years in R&D at Patagonia, but it was only being used as a winter jacket liner. No one thought it could be adapted to sporting goods because they didn’t think anyone would pay $50 for a T-shirt. Plank saw it and wanted to bring it to the consumer. Now Harward is Under Armour’s vice president of materials.

“Our commitment to innovation originally came out of necessity, and we’ve never lost that sense of entrepreneurship and collaboration,” says Haley. “We look at innovation as a completely open platform. A lot of companies are afflicted with Not Invented Here Syndrome. We’re the opposite. I actually get graded more harshly if too much of what we’re making and introducing to the market is made in-house.”

Sometimes CEO Plank walks into Haley’s office and draws a circle on the whiteboard. In the middle of that circle, he draws a T-shirt and says, “Don’t forget about this.” It’s a statement harking back to 1996, reminding his innovation department that if he had gone then to any of Under Armour’s now competitors with his idea for a form-fitting, moisture-wicking T-shirt, they probably would’ve sent him on his way. “So sometimes the simplest ideas are the best ones,” says Haley. “And we need to be humble enough to know that the next great thing might come from some kid playing college football who happens to have a better idea.”

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About the author

Jeff Beer is a staff editor at Fast Company, covering advertising, marketing, and brand creativity. He lives in Toronto.